Property insurance coinsurance calculator

Explore a simplified property-insurance underinsurance calculation. This is not health-insurance cost sharing.

Original worked example

Assume property value of $500,000 and an 80% requirement. Required insurance is $400,000. Carrying $300,000 produces a 75% ratio. For a $100,000 covered loss, the adjusted amount is $75,000 before a $1,000 deductible, leaving $74,000 in this model.

Formula and assumptions

Required insurance = property value × required percentage. The applied ratio is insurance carried ÷ required insurance, capped at 100%. Multiply the loss by that ratio, subtract the deductible, cap at the entered insurance limit and floor at zero.

Read the actual policy

This exercise assumes a coinsurance condition applies and that you have identified the correct valuation basis. Agreed-value provisions, waivers, blanket limits, endorsements, other insurance and settlement conditions can change the result. It does not decide coverage or the amount owed.

For an example of policy wording using this sequence, see the historical policy exhibit hosted by the Texas Department of Insurance. It is a specific historical form, not a statement of every current policy.